India's Solar Surge Hits Record Highs, Policy Mandates Spark Supply Chain Shifts
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India's solar sector just hit a historic high, with capacity additions surging 38% in the first half of 2026 to 34 gigawatt (GW). This unprecedented rush was largely fueled by developers scrambling to commission projects before a crucial June 1 deadline for the Approved List of Models and Manufacturers-II (ALMM-II) policy, which now mandates the use of domestically produced solar cells. Wood Mackenzie forecasts that India's total solar installations for 2026 will exceed 50 GW, setting a new annual record and underscoring the nation's aggressive push towards clean energy. This explosive growth comes as India doubles down on its 'Atmanirbhar Bharat' vision, aiming to build a self-reliant solar supply chain and cut reliance on imports. However, the stringent ALMM-II requirement, which ensures solar modules in government-backed, net-metered, and open-access projects contain Indian-made cells, has exposed a stark imbalance: domestic cell manufacturing capacity significantly lags behind module assembly. This mismatch is already leading to a projected supply crunch and rising system prices in the latter half of 2026, threatening to slow the very momentum it initially created. Further complexities arise from the phased removal of waivers for inter-state transmission charges, alongside an ongoing push for Production Linked Incentive (PLI) scheme to bolster local manufacturing from polysilicon to wafers. As the industry navigates this tightrope, the Ministry of New and Renewable Energy (MNRE) has offered a temporary reprieve, extending ALMM-II waivers for net metering and open access projects until December 31, 2026, and for some nearing completion. The coming months will be critical to see if domestic cell production can rapidly scale up to meet demand, preventing sustained price hikes and ensuring India stays on track for its ambitious 280 GW solar target by 2030 as part of its 500 GW non-fossil fuel goal. Developers and manufacturers will be keenly watching for further policy support and the maturation of India's upstream solar value chain.